NetScientific PLC (AIM:NSCI) said it has plans in place for further growth by helping realise value from its companies – and is adapting to the environment after a challenging first half of the year.
Despite the recent market turmoil, fair value of its portfolio of 22 life science and technology companies decreased slightly to £29.2mln at the half-year stage, compared to £31mln a year ago, while capital under advisory was up 11% at £24.6mln.
The period also saw the acquisition of 30% of Vortex Biosciences for a non-cash consideration, crystallisation of £1mln fair value in Q-Bot. Post-balance sheet the company realised £110k profit on a secondary sale of a portfolio company, which NetScientific said showcased its ability to access liquidity for its private investments. Amid the roiling markets, the share price of Nasdaq-listed PDS Biotechnology fell, which was mitigated by an increase in fair value in other portfolio companies.
About £2.5mln of syndicated new investment by EMV Capital was made during the period, along with £1.3mln of further direct development and additional direct balance sheet investment.
Chief executive Ilian Iliev said: “Our portfolio of high-growth companies is well funded, with our capital light model and network of investors securing their finance needs without the requirement to deploy significant amounts of NetScientific cash.
“Our portfolio fundraising transactions generate returns through increased value of direct company holdings and a carry fee on ‘capital under advisory’. We will build on this established business model and operating template, to drive continued growth, and realise shareholder value.”
A loss for the period of £1.7mln was reported, compared to £1.4mln last time, reflecting further R&D investment loans to ProAxsis and Glycotest, plus internal investment in headcount and systems aimed at driving growth.
At the end of June there was £2.4mln cash in the bank, following a £1.5mln fundraise in June, with cash levels topped up this week as the company realised a £0.1mln profit from selling down 5.8% of its stake in Q-Bot.
Iliev said work is ongoing within several portfolio companies “on substantial liquidity events or routes to exit”.